REQUEST FOR DECISION
DATE: June 19, 2023 Report No. FIN-23-009
TO: Dan Horan, Chief Administrative Officer
FROM: Ian Irvine, Director of Financial Services
SUBJECT:
Title
2023 First Period Financial Reporting
End
RECOMMENDATION:
Recommendation
That Council receive the 2023 First Period Financial Report as attached to Staff Report FIN-23-009.
Body
RELEVANT POLICY:
Financial Accountability and Sustainability
STRATEGIC RELEVANCE:
Good Governance
BACKGROUND:
Each municipal department is responsible for reviewing their financial results each month and communicating any concerns or coding errors. Three times per year, senior management is required to provide explanations for significant or unusual variances and these details were previously compiled and reported to Council.
This report, and the attached documents, represent a shift in that process. While the reporting frequency and the need for senior management review will remain unchanged, reporting templates have been developed to better illustrate the status of the various operating and capital projects as well as the overall operational results as compared to the approved budget.
Attached to this staff report are the following documents with results as of May 31, 2023:
- Operational Budget Variance Report
- Operational Project Variance Report
- Capital Project Variance Report
ISSUES:
Discussion:
Operational Budget Variances
Overall, operating financial results for the year are within expectations, with revenues and expenditures following general annual trends. It is important to note that not all revenues and expenditures occur evenly throughout the year and caution should be taken when interpreting the percentage of budget remaining columns in the attached documents which are provided only as a preliminary indicator of results to date.
Revenue
Tax Levies and Grants in Lieu
- Property taxes were levied late in May and the PILT application was submitted to the Federal Government. Most property tax payments will be received in June while the annual PILT payment from Public Works Canada is expected in August.
- The Township also receives revenue from the various utilities (Shaw, Fortis, BC Hydro) which is provided based on 1% of the previous year’s customer usage. Letters outlining the expected amounts have been received but no amounts have yet been received.
Sale of Services
- Transportation revenue includes revenue generated through work performed on behalf of third parties. This account includes revenue recorded for projects that have been fully completed as well as those for which deposits have been received for future work. There is a significant positive variance between this revenue amount and the related expenditures, but this variance will be reduced as expenditures are recorded throughout the year.
- Development Services revenue includes subdivision, rezoning and board of variance fees but the various deposits received from applicants are recorded in advance of the completed process.
Other Revenue
- Licence revenues are represented by dog and business renewals and new applications. Due to the timing of these annual processes, most of these revenues have already been collected and recorded.
- Investment incomes currently exceed budget, and this variance will continue to grow throughout the year. This positive variance was caused primarily by the investment of the $35M debt proceeds related to the Public Safety Building.
Transfers from Other Governments
- Unconditional grants consist of traffic fine revenue and small community funding from the provincial government. These amounts are typically received during the middle of the fiscal year and are relatively consistent from year to year.
- Conditional grants include the funding from the casino in View Royal and from the Canada Community Building Fund (formerly Gas Tax or Community Works Fund) and are typically received later in the year. The casino funding has remained relatively consistent while the CCBF amounts are outlined in the current 10 year agreement due to expire at the end of this year.
Reserve Transfers
- This section includes accumulated surplus and other reserve amounts that have been allocated to fund capital projects. Additionally, the reserve for future expenditures is used to fund prior year expenditures that will be purchased or contracted in the current fiscal year.
Expenses
General Government
- includes legislation, administration and corporate services, financial services, information technology, human resources as well as grants, insurance, and municipal property maintenance. Most expenditures in this category are incurred evenly throughout the year and actual expenditures are anticipated to be lower than budgeted. Currently a positive variance exists in the Administration budget as the Economic Development Manager and other newly approved staff positions have not yet been filled.
Protective Services
- includes police, fire, emergency services, bylaw enforcement, building inspection, and animal control. While the overall costs in these areas are in accordance with the budgeted amounts, there are two contracted payments which have not yet been made. These include the annual payment to the City of Surrey for the fire dispatch service as well as payments to Victoria Animal Control Services. These payments are typically made later in the year and will be reflected in future reports.
Transportation Services
- consists of public works and engineering areas as well as work performed on behalf of third parties. As several professional services projects, including the sewer management plan, have not been substantially completed, this area appears to be significantly under budget, however this will shift as more project costs are incurred.
Debt and Transfers
- these sections are comprised of debt issuance costs and transfers to capital projects and the Township’s reserve funds. Capital transfers are made as project costs are incurred and the reserve contributions are made evenly throughout the year. Additionally, a positive variance exists due to the timing of the Township’s semiannual debt payments.
Operational and Capital Project Variance Reports
Appendices 2 and 3 to this report illustrate the budget variances and remaining balances for the supplemental operating and capital items approved in the 2023 Financial Plan. This report also includes the status of each project, including a projected timeline for commencement or completion (if known). Projects that span the entire year, or multiple years, will have a descriptor of “Ongoing”, while projects with an unknown completion date will be recorded as “In Progress”. Any project awaiting operational resources or pre-requisites from an external party are identified as “On Hold”.
Due to the timing of this initial report in relation to Financial Plan adoption, it could be anticipated that several projects will have little or no expenditures to date. As we move through the fiscal year, the financial information and project status will continue to be updated as more costs are incurred.
ALTERNATIVES:
That Council receive the 2023 First Period Financial Report as attached to Staff Report FIN-23-009.